y-'i.i rry/c • \ jo^/<-i
95th Congress j COMMITTEE PRINT
INTERNATIONAL TRANSFER OF TECH-
NOLOGY: AN AGENDA OF NATIONAL
PREPARED FOR THE
SUBCOMiNIITTEE ON IXTEKNATIONAL SECUKITY
AND SCIENTIFIC AFFAIRS
U.S. HOUSE OF REPR^g^^j^''El-^S
CONGRESSIONAL RE|]^feCH SER Ylg]^\
LIBRARY OF ^NGRESS "^ : «► ,^
FEBRUARY 13, 1978
Printed for the use of the Committee on International Relations
U.S. GOVERNMENT PRINTING OFFICE
20-590 WASHINGTON : 1978
COMMITTEE OX INTERNATIONAL RELATIONS
CLEMENT J. ZABLOCKI, Wisconsin, Chairman
L. H. FOUNTAIN, North Carolina
DANTE B. FASCELL, Florida
CHARLES C. DIGGS, Jr., Michigan
ROBERT N. C. NIX, Pennsylvania
DONALD M. ERASER, Minnesota
BENJAMIN S. ROSENTHAL, New York
LEE H. HAMILTON, Indiana
LESTER L. WOLFF, New York
JONATHAN B. BINGHAM, New York
GUS YATRON, Pennsylvania
MICHAEL HARRINGTON, Massachusetts
LEO J. RYAN, California
CARDISS COLLINS, Illinois
STEPHEN J. SOLARZ, New York
HELEN S. ME YNER, New Jersey
DON BONKER, Washington
GERRY E. STUDDS, Massachusetts
ANDY IRELAND, Florida
DONALD J. PEASE, Ohio
ANTHONY C. BEILENSON, California
WYCHE FOWLER, Jr., Georgia
E (KIKA) DE LA GARZA, Texas
GEORGE E. DANIELSON, California
JOHN J. CAVANAUGH, Nebraska
John J. Brady, Jr., Chief of Staff
George M. Ingram, Staff Consultant
WILLIAM S. BROOMFIELD, Michigan
EDWARD J. DERWINSKI, Illinois
PAUL FINDLEY, Illinois
JOHN H. BUCHANAN, JR., Alabama
J. HERBERT BURKE, Florida
CHARLES W. WHALEN, Jr., Ohio
LARRY WINN, Jr., Kansas
BENJAMIN A. GILMAN, New York
TENNYSON GUYER, Ohio
ROBERT J. LAGOMARSINO, California
WILLIAM F. GOOD LING, Pennsylvania
SHIRLEY N. PETTIS, Cahfornia
Subcommittee on International Security and Scientific Affairs
CLEMENT J. ZABLOCKI, Wisconsin, Chairman
L. H. FOUNTAIN, North Carohna WILLIAM S. BROOMFIELD, Michigan
JONATHAN B. BINGHAM, New York LARRY WINN, Jr., Kansas
GERRY E. STUDDS, Massachusetts
ANTHONY C. BEILENSON, California
Ivo Joseph Spalatin, Subcommittee Staff Director
Wh-LIAm Fite, Minority Staff Consultant
Forrest R. Frank, Subcommittee Staff Associate
La Verne Still, Staff Assistant
House of RErnESENTATivEs,
Committee on In^fernational Relations,
Washington^ D.O.^ Fehruary 13^ 1978.
During the course of the Committee on International Relations'
consideration of legislation to authorize U.S. security assistance pro-
grams for fiscal year 1978, the complexities involved in the transfer of
technology demonstrated the need for a thorough re\iew of U.S. tech-
nolog;^^ transfer policy. Subsequently, the (congress enacted section 24
of the International Security Assistance Act of 1977 requiring a Presi-
dential study of technology transfer policy. Among the questions to be
studied are the following :
— The economic and social impact of the transfer of technology
on the recipient countries ;
— Impact on the economies of the recipient countries of restric-
tions on the transfer of dual purpose technologies (technologies
with civilian and military applications) ;
■ — Impact of the restriction on the transfer of dual-purpose tech-
nologies on the military capabilities of potential adversaries;
— Effect of the transfer of technology on the U.S. economy and on
U.S. international competitiveness ; and
— Advantages and disadvantages of U.S. participation in inter-
national scientific and technological activities.
The committee's hearings, studies prepared by the Congressional
Research Service of the Library of Congress, and reports to the Con-
gress by the U.S. General Accounting Office uncovered several weak-
nesses in U.S. transfer policy and procedures, interagency coordina-
tion, and analysis of objectives supporting programs and practices
of the executiA^e branch. Furthermore, it became clear that the execu-
tive branch had difficulty in explaining its policy in a clear and
The Congress mandated under section 24 of the International Secu-
rity Assistance Act of 1977 a comprehensive Presidential study of U.S.
Government policies and practices with respect to the national secu-
rity ^and military implications of international transfers of technol-
ogy. The congressional intent in mandating this study is to obtain
information necessary to undei'stand the many complex issues relating
to technology t.ransfer, and, if necessary, to consider apj^ropriate
changes in legislation governing international transfers of technology.
At my request, the Congi'essional Reseai'ch Service of the Library
of Congress has prepared a study of the issues raised in section 24 of
the Intei'uational Security Assistance Act of 1977. The purpose of the
CRS study is to identify further the range of issues and problems
relating to international technology transfer. Hopefully, this study
will be helpful to participants in the President's technology transfer
policies and programs review in identifying issues and questions that
would be appropriate agenda items for the Presidential study. It is
expected that the information needed to answer the questions posed in
tlie study will be included in the President's report due to bo submitted
to the Congress no later than August 4, 1978.
Tlie observations and analyses in this report are those of the authors
and do not necessarily reflect the views of the members of the Com-
mittee on International Relations. It is hoped, however, that this study
will assist the committee. Members of Congress, and the general public
in understanding tlie complex issues involved in the international
transfer of technology.
Clemext J. Zablocki,
LETTER OF SUBMITTAL
LiHKARY OF Congress,
COXGRESSIOXAL RESEARCH SER\^CE,
Washington, D.C., February 13, 1078.
Hon. Clement J. Zablocki,
Chairman, international Relations Corrmnittee,
House of Representatives, W ashing t on, D.C,
Dear ]\Ir. Chairman : In your letter of August 2, 1977, requesting
the assistance and support of the Congressional Research Service on
the subject of international technology transfer, you aske^l us among
other things to conduct a study outlining the issues identified in sec-
tion 24 of the International Security Assistance Act of 1977. The
attached report, designed to fulfill this portion of your request, is
the product of the ideas and efforts of numerous individuals and ex-
tensive cooi'dination and liaison under the direction of John Hardt,
Associate Director for Senior Specialists in CRS.
In August, upon receipt of your request, a working group on tecli-
nolog}^ transfer was formed among the congressional support agencies
with John Hardt as the coordinator and Claire Geier (Science Policy
Research Division) and Robeit Shuey (Foreigii Affairs and National
Defense Division) sharing the duties of the rapporteur. The pri-
mary CRS analysts and specialists assisting in the preparation of
the report were, in addition to those above, George Holliday of the
Economics Division ; Jim Wootten, Yita Bite, and Ted Galdi of the
Foreign Affairs and National Defense Division; Walter Hahn, Gene-
vieve Knezo, and Wendy Schacht of the Science Policy Research
Division; and Frank Huddle, Wan^en Donnelly, Charles Gellner,
Ronda Bresnick, and William Inglee of the Senior Specialist Division.
A complete list of participating CRS staff members is provided.^
Forrest Frank and Ivo Spalatin furnished essential guidance during
tlie preparation and coordination of successive drafts.
After your letter was sent to the relevant executive agencies asking
for their cooperation in this matter, a preliminary draft of this report
was circulated in late October to the Departments of State, Defense,
and Commerce, the Anns Control and Disarmament Agency, the
National Science Foundation, and the Office of Science and Tech-
nology Policy (the executive branch agencies which are required by
Public Law 95-92 to participate in the preparation of the President's
report to Congi-ess on the military and national security implications
of international technolog;v^ transfer). Representatives of those agen-
cies, as well as staff members of your committee, the Senate Banking
Committee, the Senate Committee on Commerce, Science, and Trans-
portation, and the congressional support agencies, were invited to
attend a discussion of the reporting requirement and the CRS draft
report on November 2 at the Library of Congress. The meeting was
' See Appendix 2, p. 27.
well attended and a number of comments were submitted by officials
of the various agencies. Those remarks and contributions were taken
into account in preparing this report.
The attached document identifies most of the major issues involved
in the military and national security implications of international
technology transfer. We believe that it will constitute a useful first
stage survey in the committee's pursuit of policy perspectives in the
area of national security and technology transfer.
Director. C ongressional Research Service.
Letter of submittal v
Setting for the issue agenda 1
On national and military security 2
Four major areas of technology transfer 2
Means of technology transfer 2
International Security Assistance Act of 1977 technology transfer study
topics and issues:
Topic 1: The nature of technology transfer 4
Topic 2: The effect of technology transfers on U.S. technological
Topic 3: The rationale for the transfers of technology from the United
States to foreign countries 7
Topic 4: The benefits and risks of such transfers 9
Topic 5: Trends in technology transfers by the United States and
other countries 13
Topic 6: The need for controls on transfers of technology 14
Topic 7: The effectiveness of existing organizational arrangements in
the executive branch in regulating technology transfers from the
United States 17
Topic 8: The adequacy of existing legislation and regulations with
respect to transfers of technology from the United States 19
Topic 9: The possibilities for international agreements with respect
to transfers of technology 19
Related legislative requirements 22
1. Selected bibliography 25
2. Contributing Congressional Research Service staff members 27
Digitized by the Internet Archive
SETTING FOR THE ISSUE AGENDA
The International Security Asvsistance Act of 1977 (Public Law
95-92) signed into law by President Carter on August 4, 1977, re-
quired a number of executive branch agencies to undertake a study
on the national security and military implications of international
technology transfer. The study is to be completed by August 4, 1978,
as noted in section 24 of the act :
Study of Technology Transfers
Sec. 24 (a) The President shall conduct a comprehensive study of the policies
and practices of the United States Government with respect to the national
security and military implications of international transfers of technology in
order to determine whether sucli policies and practices should be changed. Such
study shall examine —
( 1 ) the nature of technology transfer ;
(2) the effect of technology transfers on United States technological
(3) the rationale for transfers of technology from the United States to
foreign countries ;
(4) the benefits and risks of such transfers ;
(5) trends in technology transfers by the United States and other
(6) the need for controls on transfers of technology, including controls
on the use of transferred technology, the effectiveness of existing end-use
controls, and possible unilateral sanctions if end-use restrictions are violated ;
(7) the effectiveness of existing organizational arrangements in the
Executive branch in regulating technology transfers from the United States ;
(8) the adequacy of existing legislation and regulations with respect to
transfers of technology from the Ignited States : and
(9) the possibilities for international agreements with respect to transfers
(b) In conducting the study required by subsection (a), the President shall
utilize the resources and expertise of the Arms Control and Disarmament Agency,
the Department of State, the Department of Defense, the Department of Com-
merce, the National Science Foundation, the Office of Science and Technology
Policy, and such other entities within the Executive branch as he deems
(c) Not later than the end of the one-year period beginning on the date of
enactment of this section, the President shall submit to the Congress a report
setting forth in detail the findings made and conclusions reached as a result of
the study conducted pursuant to subsection (a), together with such recom-
mendations for legislation and administrative action as the President deems
Tlie purpose of this paper is to assist in identifying the issues
implied by the nine questions in section 24 of the act. At several work-
shops at the Congressional Eesearch Service, it became clear that
several concepts needed special clarification:
1. The distinction between military and national security;
2. The maior areas of technolooT transfer, e.g., North-South,
West -West, West-OPEC, and East-West; and
3. The means by which technology transfer occurs.
In clarifying each of the concepts it is also important to indicate
the sense of priority expressed in the Congress and the ExecutiA'e, as
appropriate, in regard to these three concepts.
Ox Xatioxal axd ^Iilitary Security
The concepts of national security and military security require
clarification at the outset of this study as they are often used inter-
chantreably but in fact hold different meanings. In this study, national
security encompasses all factors including military defense, the main-
tenance of access to economic resources vital to the economy, the gen-
eral conduct of foreign relations, and all other f actoi*s nec^ssaiy to the
maintenance of the governmental and social system of the United
States. Military security, on the other hand, refers solely to the pro-
tection of the United States against physical attack.
Discussions within the International Relations Committee suggest
that broad political and economic factors — national security factors —
equal or transcend military security considerations in the assessment
of international transfer of technolog5\ This view appears consistent
with the position of President Carter in his energy speech to the Nation
on November 8, 1977.
Our national security depends on more than our aimed forces. It also I'ests
on the strength of our economy^ on our national will, and on the ability of the
United States to carry out our foreign policy as a free and independent nation.
America overseas is only as strong as America at home. [Italic added.]
Four ]\Ia.jor Areas of Techxologt Tr^vxsfer
Congressional interest was addressed to economic, political, and mili-
tary aspects of "Western nations' relations with OPEC and among
themselves on transfer of technology, that is, West-AVest relations;
interest in East-West relations followed these other areas in interest.
The congressional interest in a broad geographic range of technol-
ogy transfers appears to be consistent with the administration's views,
as expressed by the President's assistant for national security, that
separate policies must be developed for the three major areas.^
In the 1960's, world affairs were dominated by growing diversity in the Com-
munist world and by a competitive relationship between the United States and
the Soviet Union. * * *
This should no longer be. or need be, the case. East-West relations, notably
U.S. -Soviet relations, involve and will continue to involve elements of both
competition and cooperation. We are quietly confident about our ability and
determination to compete, economically, politically, and militarily. But managing
a relationship that will be both competitive and cooperative cannot be permitted
to dominate all our persiiectives. Today, ice do not have a realistic choice between
an approach centered on Soviet Union, or cooperation with our trilateral friends,
or on North-South relations. Indeed, each set of issues must be approached on its
own terms. A world where elements of cooperation prevail over competition
entails the need to shape a wider and more cooperative global framework.
Means of Techxologt Traxsfer
Recent interest of the House International Relations Committee in
the U.S.-U.S.S.R. Science and Technology Exchange Agreement ilhis-
trated the breadth of perspective in assessing teclmology transfer.
The training of scientists, multilateral and bilateral governmental,
business, and academic exchanges all are judged relevant mechanisms
for technology ti'ansfer assessments, as are the exports of advanced
machinery, industrial processes, and technological know-how.
1 Dr. Zblpnlow Brzozinskl's remarks to the Trilateral Commission in Bonn, Federal
Republic of Germany on Oct. 25, 1977.
The emphasis on people and systems in the effectiveness of transfer
was also stressed by the Department of Defense Science Board study,
"An Analysis of Export Control of U.S. Technoloco'— A DOD Per-
spective'' (the ''Bucy Eeport"). Tlie general thrust of Government
interest, expressed in the Cono-ress and in executive agencies in defining
technology transfer for purposes of the legislative mandate for the
study, is to prescribe the broader definitions of national security,
identify the means of technology transfer, and to reevaluate U.S. policy
priorities and concerns regarding transfers to the world's major geo-
political areas. Therefore, in this study, the broader aspects are given
more, rather than less, priority than the narrower concepts of mili-
tary, West-East, and product-process transfer in evaluating U.S.
policy and procedures.
INTERNATIONAL SECURITY ASSISTANCE ACT OF 1977
TECHNOLOGY TRANSFER STUDY TOPICS AND ISSUES
Topic 1: The Nature of Technology Transfer
1. Definition of Technology and Technology Transfer.^
''Technology" encompasses all basic and applied research, all
Edisonian inquiry, all nianuf acture and use of products, all knowledge
rationally applied to agriculture, biomedicine, applications of soci-
ology and other behavioral sciences, and any other rational human
actions toward intended results.
''Technology-' is defined in the Merriam- Webster Dictionary, 2d
edition, as follows:
(1) Industrial science: the science or systematic knowledge of
the industrial acts, esp. of the more important manufacturers, as
spinning, Aveaving, metallurgy, etc.
(2) Terminology used in arts, sciences, or the like.
(3) Any practical ait utilizing scientific knowledge, as horti-
culture or medicine : applied science contrasted with pure science.
(4) Anthropol. Ethnotechnics.
The IMerriam-Webster Dictionary, od edition, defines technology
(1) The terminology of a particular subject: technical lan-
(2) a: tlio science of the application of knowledge to practical
purposes: applied science: b (1) the application of scientific
knowledge to practical purposes in a practical field: (2) a techni-
cal method of acliieving a practical purpose: (3) the totality of
the means employed by a people to provide itself with the objects
of material culture.
The complex and incompletely understood process of "teclmology
transfer" involves communication in which the message contains tech-
nological elements. The transfer can be vertical (i.e., successive trans-
missions of ideas cumulatively toward a complete design or process)
or horizontal (from one user to another). Either kind of transfer can
be intranational or international.
Info]-mation transfer is essential, but not sufficient by itself, for
successful teclmology transfer to take place. Information transfer per
se, is not tcchnolo.'xy transfei". Technology transfer is not a value-free
process. It is initiated, operated, accelerated, hindered, or curtailed
])y mniiy diverse factoi's.
Teclmologv^ transfer is by agents not agencies, and people both
make barriers to the transfer of technology and make them permeable.
"" Ahstrnotofl from F.S. Conqrrpss. TToiisp Oommlttoo on Soipnof nnd Terhnolocv, Sclonoe
Poller: A Work-in:.' Glossary fWashln?ton. D.C.. U.S. Oovernnient Prlntinc Offioo. 1070),
pn. ."=!S^^n : find "Snniniarv" Waltor ITnhn nnd Siisnn Dosrhor. "Summary" In Marvin J.
Optrnn an.l Harold F. Davidson, ods.. "Indiisfrlal Tpclinolopv Transfer: Procpodlntrs of Iho
NATO Advnncod Stiidv Tiistltnto on Industrial Technology Transfer" (Leydon: Noordhoff,
Lovden, 1077), pp. 420' 400, osporially pp. 4.".1, 4P.0.
Technolo^ transfer is a process iiivolvin<T: renl })eoj)le at botli tlic
source and user ends. Teclinol()<j:y transfer focuses on the process, not
on the substantive technolo<ry per se.
''Appropriate teclinolo<ry'', in the context of discussions on North-
South economic rehitions is that teclinolo<ry especially, but not ex-
chisively, low and medium teclmoloijjy, desi(j:ned to meet the indi<reiious
technical skills, educational and em|)loyment ca})abilities: luitural. in-
dustrial, and tinancial resources ; and the material, economic, and social
needs of the recipient.
2. International technolofry transfers encompass a broad spectium
of transactions such as training of foreign nationals (whether in low^-
level agricultural technology or in nuclear physics), display of U.S.
products at trade exhibits, excliange of knowledgeable people, descrip-
tion of products and production techniques in conmiercial literature,
sale of complex weapons systems or machinery, licensing of high-
technology production systems, furnishing turnkey factories and i*e-
search facilities, and providing personal technical services to accom-
pany transfers of hardwai-e and systems. The important task raised by
Public Law 95-92 is to identify types and conditions of international
technologA^ transfer that are of particular significance to U.S. national
interests and military security. Related considerations are whether
the technology to be transferred is "revolutiontary" ; i.e., involving
major or breakthrough type change; whether it will significantly
improve the recipient's economic, technological, or military potential
in ways detrimental to U.S. military security; w^hether it involves an
item of significant military equipment; whether it is related to a lethal
or nonlethal system, or to an offensive or defensive military system.
Existing methods are inadequate for recording flows of technology
and for measuring the effectiA^eness of technology transfer mecha-
nisms, and the economic, political, and security implications of various
How are international technology transfers recorded? What international
technology transfers have significant direct or indirect implications on U.S.
national interests and what are the most meaningful and useful measurements
of these transfers and their implications?
3. It has been asserted that wliether public or private, technology
transfer mechanisms are characterized in terms of the following
(1) Scope — ^bilateral versus multilateral ;
(2) Function — whether the transfer aims at:
(a) acquiring a new capability (R. &D.) ;
(b) making effective use of an existing capability (opera-
(c) coping with the consequences of the use of a capability
(3) Instrumentality — whether the transfer calls for:
(a) coordination of independent policies ;
(b) joint facilities;
(c) a common policy integrating specific policies: and
(d) a fully unified policy substituting for independent
2 Henry Nau, "Technology Transfer, and U.S. Foreign Policy" (New Yoi'k ; Praeger,
1976), p. 13.
Does this or another typology capture the essential elements of any technology
4. The importation of foreign teclinology and the accompanying
release of civilian resources for use in military programs may benefit
incrementally the military capability of the recipient.
Under what circumstances does civil technology transfer make a significant
contribution to the military potential of the recipient country? What is the
acceptable risk when trading advanced technology to a potential adversary?
If a nation's military outlays are routinely accorded preference regardless of
technology imports, is the releasing effect really significant for the military
sector? Is it offset by a countering resource demanding effect?
5. The U.S. Government controls some technology which it can
use to achieve foreign policy goals. However, much American tech-
nology is protected by the proprietary rights of j)rivate individuals,
corporations, and institutions and therefore is not freely available to
foreign policy decisionmakers.
What is the nature and extent of technology in the public domain, under the
control of the Government, and, conversely, in the possession of private propri-
etary concerns ? What is the extent of involvement of each of these three sectors
in the transfer of technology ?
Topic 2: The Effect of Technology Transfers on U.S.
1. The advantageous technological position which the United States
has held for many years is said to be eroding. One of the reasons
offered for this alleged decline is that U.S. policy allows foreign
competitors too easily to acquire America's technology, and adapt it
for tlieir own industrial and research programs. The foreign country
thereby produces the end items, develops the product improvements
and spinoffs, and, in some cases, is able to surpass the United States
in a particular technologA^ On the other hand, the expoit of tech-
nology can enhance the U.S. technological and trade position with
respect to other countries if the earnings from the export and sale of
U.S. technology are applied to further U.S. research and develop-
ment and bring other countries the income with which to increase their
imports of U.S. goods and services.
Is U.S. technological superiority declining? What is the nation's status? What
are the key measures of that status?
Is there a positive or negative correlation between the status and trends of
U.S. advanced technology and the level, nature, and trends of its technology
transfers? Are there verifiable cause and effect relationships?
Is U.S. military and industrial technological superiority over its allies and
other friendly countries beneficial to U.S. national interests?
How can the life cycle of a particular teclinology be estimated? What factors
affect the rate with which a nation can absorb technology and exploit it for
How can military related technology transfers have an impact on U.S.
technological superiority? Could they increase the number of competitors
for the United States in the long and short run? Could they affect U.S. unemploy-
ment through widespread increase in multinationals? Or will the technolofjy
transferred necessarily be behind the advanced level on which U.S. technological
superiority now rests?
2. International arms and weapons transfers provide forei<m coun-
tries with some of America's advanced militar}- teclinolo<i;y, the same
equipment used by U.S. forces. There is a possibility tliat the tech-
nology embodied in this equipment could be copied, that counter-
measures could be developed, or that the texihnology could be used
as a stepping-stone to develop advanced technologies.
Does the sale of advanced U.S. weapons systems and of associated support
technology degrade U.S. military technological superiority?
3. It was concluded in the Bucy report ^ that there is a wide spec-
trum in the elTectiveness and potential danger of various transfer
mechanisms in terms of their potential effectiveness in military
Which forms or mechanisms of technology transfer are most detrimental to
U.S. technological superiority? How do the deleterious effects vary with the
type of technology being transferred and the nation to which the transfer is
being made? How can key factors in technology development and critical aspects
of technology transfer mechanisms be identified?
4. SALT I froze United States and Soviet ballistic missile inven-
tories; the objective of SALT II is to begin a process of actual force
reductions. SALT negotiators are also hopeful of gaining control over
the qualitative arms race. If actual numl^ers are reduced and develop-
ment is frozen but technology transfers to such major powers as China,
France, Germany, Japan, and Britain are not controlled, the outright
military superiority which distinguishes the United States and Soviet
Union as superpowers may be eroded.
Is it likely that the diffusion of technology will seriously undermine the mili-
tary superiority of the United States and the Soviet Union as the quantitative
levels of United States and Soviet strategic inventories are reduced via the SALT
process and qualitative advantages become increasingly salient? Should a future
SALT agreement include a provision prohibiting or regulating transfers of
strategic weapons and possibly other military technology to third countries? How
would such a provision affect the security of the United States?
Topic 3: The Rationale for the Transfers of Technology From
the United States to Foreign Countries
1. The current International Security Assistance Act implies that
a substantial relationship exists between technology transfer and
military securitv and that U.S. policy should facilitate transfers that
benefit U.S. military security or other national interests and restrict
those that are detrimental to those interests. However, the primary
rationale in the Laiited States for the transfer of technology has been
commercial. Technolog}^ in the United States is predominately owned
and transferred by the private sector rather than the Federal Gov-
ernment. Some technology transfers are encouraged or prohibited by
the Government in the interest of national security. The difficulty
in formulating a comprehensive technolog^v^ transfer policy lies in
establishing boundaries between governmental and commercial
3 Dpfense Science Board Task Force. "An Analysis of Export Control of U.S. Technology —
A DOD Perspective" (Washington, D.C. ; Office of the Director of Defense Research and
Engineering. 1976), infra, p. 2.
Wliat are the primary factors, including but not limited to national security
factors, considered in shaping U.S. technology transfer policies? What concerns
are foremost? What are the criteria used by the executive branch for establishing
2. Some political scientists believe that by maintaining the de-
pendence of foreign countries on the United States for weapons, spare
parts, technical advice, and maintenance, this country^ gains influence
over the policies and behavior of those states (costs and benefits are
discussed under topic 4). Others suggest that military and industrial
self-sufficiency of friendly countries increases the military capabilities
of those countries and those of U.S. collective defense s^^stems, and
thereby enhances U.S. security.
Is the basic assumption that the United States by transfer of military weapons
technology, enhances its national security interests by pronwting foreign depend-
ence on this country, or by promoting military and industrial sclf-sujlciencg of
friendly foreign countries?
3. Retransfer of U.S. technolog}' to Eastern countries or other na-
tions may result in applications of the technologj^ in ways adverse to
United States or other Western interests. This retransfer may also
occur in third country transfers of technology supplied by Western
nations other than the United States.
Given that there is little evidence of retransfer of U.S. technology to the East
throagh third countries, what basis would there be for increasing U.S. con-
trols on exports to other Western countries? Should studies be undertaken to
trace third country transfers of technology originated in the United States?
4-. Through aid and trade tlie Xortli-South technological relation-
ship involves both the United States and the U.S.S.R. and is there-
fore directly affected by the East -West relationship.
What is the nature of the Soviet military/scientific/technical/trade relation-
ship with the developing nations? How does it impact on U.S. relations with the
LDC's? In the military (arms and advisers) arena? In the civilian arena (con-
sumer goods) ? In production goods arena (machinery, etc.) ?
Is the Soviet relationship with the LDC's in the several arenas competitive
with the United States? To U.S. benefit? To U.S. detriment? How does the United
States-Soviet science and technology interaction relate to and affect the U.S.
position in the North-South relationship?
5. Coproduction or licensed production of entire weapon systems can
make a country more independent of foreign suppliers, but arrange-
ments which require the continued supply of technical assistance, com-
plex subsystems, or matei'ials from the United States can render the
state economically dependent as well as militarily dependent on the
United States. The sale of weapons also increases the recipient's mili-
tary capability but, without the ability to produce spare parts, am-
munition, and fuel, and independently to maintain the weapons, the
recipient is dependent on the supplier to support its military opera-
Are TT.S. military technology exports intended to increase or decrease foreign
dependence on the United States? Under what conditions?
fi. The T^nited States may favorably influence policies of nations by
facilitating technolog\^ transfer and, conversely, it may alienate na-
tions by withholding or restraining technology transfer. To the extent
that technology transfers facilitate meaningful improvements in U.S.
foT-eiiiii rolations witli its adversaries, the transfers are in the intei'csts
of national security. However, if the inipi-ovenients in relations are
superficial or transitoi-y, the United States may Im^ incnrrin<i- risk> to
its national security by transferrin <>• valuable technology to potential
adversaries without commensurate benefits.
To what extent and under what conditions sliould the United States use tech-
nology transfers for foreign policy purposes, and what means should the Govern-
ment use to insure the henefits from such transfers?
7. .\ foreiLiii (ouiitiv's pei-cc})ti()n of its needs for technology often
ditfcis from the I'.S. perception of that need and from the U.S.
evaluation of the effects of such a technolog}- transfer on American
What mechanisms presently exist for evaluating United States and other
countries' perceptions of the need for technology transfers? What kind of mech-
anisms should be created to assess these perceptions to promote mutual accommo-
dation between the i)erceptions of the United States and potential recipients?
Topic 4: The Benefits and Risks of Such Transfers
1. The Defense Science Board study, the "Bucy report,'' identified
diffei'inir levels of effectiveness of ^'ari()us nu^chanisms. It stated that
the more effectiv(^ mechanisms required ti<rhter controls than the less
effective means. Oidy key factors to he considei-ed in assessi]i<r tech-
noloof}' transfei' may be the relationship of the recipient country to the
United States, the countrv's political stability, its geographic
proximity to hostile countries, and the strategic importance of the
What is the danger of loss of strategic U.S. technology to hostile foreign nations
through the various forms of transfprV
What factors in addition to military should be taken into account in applying
the test '"may adversely affect the national security of the United States"?
To what extent should we take into account in export control decisions broader
U.S. interests than those involved in the transactions themselves, e.g. :
(1) Decreased pressure on world supplies of scarce resources such as oil
and gas resulting from transfer to the East of Western technology to exploit
(2) Expansion of world food production.
(3) Participation in global efforts such as World Weather Watch.
2. U.S. military technology transferred to another nation may be
employed to achieve internal .stability: to redress an imbalance of
regional power: or possibly for aggression. The recipient country may
apply the U.S. technology in its relations with a nnitual adversary,
a neutral, or a U.S. ally. Some military technology can be used in
def(Misive or offensive operations, so the regional cost/benefit calcula-
tion is very complex and filled with uncertainties.
The transfer of civil technology may be internally destabilizing if
an inordinate amount of foreign exchange is used to buy the tech-
nologv thereby hindering other economic or social programs, although
the transfer of appropriate technology can aid development: increase
employment, and promote economic, social, and political stability. A
new technoloiiy^ may generate multiple ])ositive as well as negative con-
sequences in the local economv and enA'ii'onment. Agricultural mech-
anization can cause large-scale migration to urban areas where un-
emplovment. Inmgei". and disease abound. The creation of an industrial
l)as(> witliout a local supply of raw materials creates a dependency on
20-590— 7 s ?,
foreign countries for materials and, frequently, for export markets.
.V depressed world or regional market can threaten the econouu^ of
such a country and lead it to destabilizing actions. Technology trans-
fers can also produce rising expectations, frustrations, and great social
disruption. The development of labor-intensive technology can
generate needed employment.
Do transfers of civil or military techuology typically contribute to the stability
of foreign nations and regions? Under what conditions? What role should inter-
mediate technology play as an alternative to the transfer of large-scale, ad-
vanced technology? What would be the consequences for stability or instability
of recipient nations of emphasizing transfer of appropriate technologies? What
policies should the United States employ to promote economic growth in de-
veloping countries with due consideration for the nation's ability to absorb
technology and acquire and allocate capital?
3. If tlie increased military capabilities uudce the foreign country
moi'e iudepe]ident. then it uiay become a less dependable and loyal
ally. If the military aid ivialies the foreign country inoi'e dependent, it
luay become a uioi-e dependable ally but Avould require continued U.S.
technical assistance and logistic support. While these transfers may
reduce the I^.S. defense burden, they would also reduce the U.S. con-
trol of its military technology.
Some analysts suggest that the transfer of technology to another
country creates an excessive demand for U.S. raw materials, spare
parts, technical services, and even end items, thereby reducing
America's oAvn military capabilities. Others assert that by licensing
U.S. teclmology and selling sophisticated systems, the United States
reduces the item costs of military and industrial equipment and thus
affords itself the development or purchase of more equipment.
Does technology transfer enhance U.S. military security by increasing allied
military strength? Or are costs of transfers in items of equipment outflows so
burdensome to the United States as to imperil national and military security?
4. By standardizing U.S. weapons and operating systems with those
of U.S. allies, or at least making them interoperable, joint militaiy
operations are facilitated, mobilization and reaction times can be
reduced, and logistic support, will be improved and economized. How-
ever, direct U.S. control of its sophisticated technolog}^ is reduced, and
the possibility of disclosure of strategic technology to a hostile poAver
To what extent do the standardization and interoperability of our allies' mili-
tary equipment and systems beenfit U.S. military security?
T). Providing nuclear energy technology to foreig^l nations decreases
tlu'ir reliance oji fossil fuels, increases theii- industiial capacity, de-
velops their economies, and thus builds their strength and stability.
Under the Non-Prol if (^ration Treaty the United States agreed to pro-
\i(le nuclear energy technology to signatories in exchange for their
agreement to refrain from the acquisition of nuclear weapons. To meet
the conditions of this treaty and maintain U.S. credibility, the United
States must supply the necessary technology for the civil use of nuclear
Some analysts hold, however, that the ti'aiisfer of miclear energy
technolog\^ enhances the ability of foreign countries to produce nuclear
weapons and ineie;ise>^ the ])robal)ility of nuclear proliferation.
What is tlie link Itetwoeu tlic lj-ai»sl"ei' of mirlcjir ('ii<'i-j;y Icclniolo'^y ;iiul ii)«^
proliferation of nuclear weapons? How does tlie i)roliJ('rati(»n of diiclcar wcap.tns
affect U.S. military secnrityV Under what conditions and with respect to what
What do individual couulry ease studies (tliat is. Canada. .lapai;. Au.^l r.ilia )
show in regard to such matters as the following :
(1) The dependency of the country's peaceful nu<'leai* activities on lians-
fers of technology from other counti-ies, especially from the United Stales.
(2) The reactions of each counlry to efforts of the United States to regu-
late nuclear technology transfers in order to impede the spread of nuclear
weapons ca])al)ilit ies.
(3) The policies and actions of each country to control its own exports of
nuclear technology to other countries. How do these policies and actions
affect U.S. security ainis",-'
(4) To w^hat extent might the transfer of technology for the discovery and
subsequent mining of uranium ore to friendly countries contribute to the
national security and energy resources of the United States?
(). Increasin<^ China's industrial and military capabilities throuuh
technology transfers would probabl}^ tie dowai more Soviet military
forces in Asia and could possibly reduce the Soviet tlireat to Europe,
might help deter a Soviet military venture against China, and Avould
probably increase Peking's interest in improving Sino-American re-
lations. Such transfers might serve to increase U.S. leverage in deal-
ings Avith the Soviets over sensitive issues such as SALT and force
reductions in Europe. On the other hand, such transfers might damage
U.S. efforts to achieve a detente with the Soviet Union and might
dangerously increase the Sino-Soviet conflict. Increasing China's tech-
nological capabilities might also increase the threat to U.S. allies in
Asia such as Japan, Korea, Taiwan, and the Philippines. Transfers
even of civil technology might increase China's economic strength and
enhance its abilit}^ to exert influence on its neighbors.
What are the costs and benefits of altering the Sino-Soviet power balance
through technology transfers to China? What is U.S. policy and its rationale?
What types of technology could })e transferred to China with little risk, what
types are prohibitively dangerous, and what types fall between tliese pxtrenies?
7. Since the 1972 vShanghai connnunique. T^.S. scientists liave been
visiting the People's Republic of Chiiia and Chinese scientists liave
visited the United States.
How^ do scientific and technical exchanges between the United States and China
contribute to the development of the People's Republic of China? Could it con-
tribute to Chinese military potential? If so, how would such technology transfers
affect U.S.-U.S.S.R. relations?
8. Since the withdrawal of Soviet technicians from People's Re-
public of China, Cliina has been edgy about accepting aid from abroad.
How does China's attitude affect receptivity by People's Republic of China to
U.S. technical transfer matters? What are the implications of China's attitude
for U.S. technology transfer policy? To what extent and in what ways does the
growing military strength of People's Republic of China impair or contribute to
U.S. national security?
9. Til some (levelo])ino; countries, the hidustrial base is controlled by
a small group of powerful and wealthy men (government leaders in
some cases). Transfers of sophisticated technology to such countries
majr tend to enhance the power of these few individuals, further cen-
tralize the economic and political systems within the country, and
decrease the prospects of democratic capitalism. However, national
stability can also be enhanced by economic and technological devel-
opment that primarily benefits the low-income portion of the popula-
What are the implications for U.S. interests of the effect of teclmology trans-
fers on the internal economic and political patterns of developing nations?
10. Technologj^ transfer controls tend to serve as disincentives to
U.S. imiovation and international sharing of technology; they tend
to deter rather than to encourage such processes.
Wliat are the long-term effects on the U.S. technological posture (i.e. the
balance of technology, diffusion, and the rate of innovation) of U.S. technology
transfer controls V
11. The relationship between the Ignited States and the Soviet
Union, i.e., the policy of detente, implies a linkage among security,
economic, and political factors. Thus, the net economic benefits of
technological exchange programs may be related to jwlitical and
What are the dominant considerations in American policy assessments of United
States-Soviet Union cooperative science and technology programs? How should
the henefits and costs among and within programs be assessed? What new mecha-
nisms might be introduced to facilitate this assessment process?
12. The Soviet Union is one of the largest producers of petroleum
in the world and has vast natural gas reserves which are likely to
l)e increasingly proven and brought into production. Imports of U.S.
eiiergy technology — submersible pumps, drilling equipment, and off-
shoi'o platforms, foi- oxauiple — may be critical to contimied effective
ex]:)lorati()n. doNolopment. and exploitation of Soviet energy I'esources.
Exporting T.S. energy technology critical to Soviet energy develop-
ment pi-esents policy options — such as withholding or restricting ex-
|)oit> — and raises questions of national interest — such as whether U.S.
energy technology expoits could ennaiicc the Soviet military and
Dues tlie export of commercially nvailnlile U.S. enei-gy technology to the Soviet
T'nion impact on critical military security as well as national security (luestions?
lo. Recent AA'estern technology transfers to the Soviet I^nion sug-
gest that considerable domestic investment is frequently required to
insure adoption of imports of technology. At the same time. Western
technology transfers release some Soviet resources, which can then
be (1 i verted to other sectors.
Will the Soviets find that imported technology is more resource-demanding or
more resource-releasing? What impact does the importation of Western tech-
iiobtgy have on the domestic investment allocation of the recipient nation?
14. The needs, priorities, and resources of the F^l^C's sometimes con-
flict witli those of the developed connti'ies. Information on these issues
may be provided in the National Review Papers re(|uired of the LDC's
for the U.X. Conference on Sciences and T(H'hnology for Devel()[)ment.
How would the restructuring of trade and technology transfer systems as
pro])osed by the LDC's affect the XLS. domestically in terms of labor, small busi-
ness, and industry? How realistic are the demands of the UDCs likely to be in
this regard, and what steps might the United States take to make LDC expecta-
tions more realistic? To what extent do LDC proposals conflict with the goals
of T'.s. intei-est groups and how can the (Government alleviate such conflicts?
IT). In interacting with the U.S.S.R. (and other nations with com-
parable systems), the United States is dealing with a state monopoly,
unlike its dealings with Western countries and Japan. A central issue
to be examined in this context might be the implications for the
United States of the economic priorities imposed by a state monopoly,
e.g., artificial limitations on foreign trade in areas siicli as consumer
goods in wliich there may be tremendous internal demand, while pro-
moting transactions only in areas such as advanced technology^ as
defined by political/military priorities.
What is the impact of such systemic differences on U.S. intern ction in science,
technology, and trade with such nations? Should the analysis of technology
transfer take into account those systemic differences as a central feature?
Are U.S. corporations at a disadvantage in dealing with state monopolies?
How might the U.S. Government further help U.S. corporations in such dealings?
Topic 5: Trends in Technology Transfers by the United States
and Other Countries
1. To assess past and current technolog}' export policies and to be
able to recommend new policies, the Congress needs considerable data
on such transfers.
What is the status of the Government's data base concerning past technology
2. Many aspects of teclmology transfer remain ambiguous; trends
and implications are unclear.
What additional measurement devices should be applied to the analysis of U.S.
technological trends and the trends in international technology transfers? What
are valid measurements of the diffusion and application of technology that is
transferred from one nation to another? What are the parameters to be measured
to clarify technology transfer trends and implications (monetary costs, other
economic factors, social impacts, future consequences) ? Precisely what informa-
tion about the trends and implications of technology transfers is critical to
policymaking and hovr might such information be utilized by the Congress?
3. Many industrialists hold that if the United States does not sell
sensitive teclmology to a foreign buyer, some other developed nation
What degree of international competition and cooperation has there been in
the technolog3' market? What portion of international sensitive exports are con-
summated by the United States? Which are the other leading countries ? What are
the recent trends in this distribution? Are there areas in which the United States
has no foreign competition ?
4. Some analysts believe that an increasing volume of advanced
technology is being exported from the United States and other West-
em countries wliicli may have serious impacts on international stability,
peace, and U.S. security.
What i)ortion of international technology exports have significant military
implications? What have been the trends? What is the American experience in
exporting sensitive or critical technology ?
5. Some officials justify transfers of military technology on the
theory that such transfers will stabilize regional conditions and
enhance the prospects for peace; some analysts blame such technology
transfer policies for the outbreak of hostilities and internal disorders.
Is there a correlation between the trends in international technology transfers
and world stability? What are the facts? Can the various transfers of sensitive
technology be differentiated, in the sense that some kinds are stabilizing and
others destabilizing? To what extent does the economic burden of maintaining
weaponry donated or sold by the United States to LDC recipients handicap their
economic development ?
6. Soviet transfers of military technology to allies and clients have
shifted from aid toward sales. The sales have tended to rednce Soviet
control in client countries and raise the sophistication of the trans-
Do increasing sales of sophisticated arms by the Soviet Union provide signifi-
cant new opportunities and risks to our security ; that is, do sales provide op-
portunities to assess Soviet developments in weaponry or do they create risks
that sophisticated weapons in the hands of politically unstable Soviet clients may
further endanger the peace in various regions? Should limitations on arms sales
be related to agreements on sales of civilian transfers in the Soviet Union?
Should agreements on sales of civilian nuclear reactors to various nations be
based on joint Soviet-American, as well as international agreements in order
to avoid proliferation of nuclear technology that might be translated into mili-
tary uses? Could there be benefit in purchasing advanced Soviet technology,
often military related, through third countries in order to extract the technology
or to develop countermeasures?
7. U.S. efforts to achieve effective control of international traffic
in nuclear energy technology have not met with the full cooperation of
other supplier states.
To what extent are other supplier states following a policy of controlling ex-
ports of nuclear technology in order to impede the spread of nuclear weapons
capabilities to additional countries? Are there instances in which the policies
or actions of other supplier countries are at variance with the aims of non-
proliferation espoused by the United States? What efforts are being made by
the United States and other supplier countries to harmonize their policies on
Topic 6: The Need for Controls on Transfers of Technology
1. Controls on U.S. exports of nuclear technology, militaiy tech-
nology, and other sensitive technolog}^ should provide protection
against acquisition of the technology by a hostile foreign power.
In what cases have existing regulations failed to provide such protection?
What were the security implications of the technology losses? What additional
controls could have prevented the loss? How can the Government distinguish the
kinds of technology that should not be transferred? What criteria should be
applied and how do they differ from past criteria? In considering the test "make
a significant contribution to the military potential", to what extent should past
experience of demonstrated adverse application be determining? To what extent
should prototype as compared with serial production in potential recipient
countries be determining?
2. There is a large measure of agreement, that nuclear weapons
technology is so critical to U.S. security that no export can be allowed.
IIow effective can controls of nuclear technology be? What can they be reason-
ably expected to accomplish and at what cost? Are there other forms of tech-
nology that should be given similar protection?
3. Other Western countries tend to be less restrictive than the
United States in controlling high- technology exports to Communist
Are Western European countries and Japan considered likely condnils
of lii^li technology to the East? Are tighter controls on U.S. exports to Western
countries needed? Are CoCom export controls adequate?
4. U.S. multinational corporations are ainon;[^ the most active means
of transfer of U.S. technology to foreign countries.
Are additional Ciovernment controls on the foreij^n economic activities of multi-
national corporations needed? In particular, is more Government re^julation of
foreij^n investment or technical information exchani?e by U.S. -based firms needed
or do current government constraints limit U.S. -based firms competitiveness?
5. Leaders in many developing countries have complained about tlie
basic ground rules under which technolog}^ is transferred in the pres-
ent international economic system. They have proposed changes in the
international economic order which would provide the developing
countries with greater access to industrial technologies at lower cost.
Should the U.S. Government intervene in private commercial transfers of tech-
nology to developing countries, in order to insure that industrial technologies
make a greater contribution to the development process? If so, how? Should the
U.S. Government endorse proposals for a binding code of conduct for interna-
tional technology transfers? What actions can the U.S. Government take to help
developing countries absorb technology more effectively?
6. U.S. technology is largely in the hands of corporations. The
private sector selectively transfers teclinolog}^, in response to the
foreign market demands and its own capabilities, to earn profits which
help support the U.S. economy. ^lany businessmen argtie that the
Government should support technolog^^ transfer programs that boost
the American economy or at least should adopt a policy of laissez
faire. However, some transfers have direct or indirect implications
for U.S. security, so the Government has become involved in facilitat-
ing or restricting certain types of technology transfer.
Can and should the Government effectively control the transfer of technology
given the private commercial orientation of U.S. technology and the intangible
form of much technology? Do Government regulations excessively hinder innova-
tion and U.S. competitiveness in the private sector and create antagonistic rela-
tions between industry and Government? Does current government involvement
in the technology process reflect the appropriate balance between private sector
and public sector interests?
7. U.S. security is based on a collective defense system and depends
on the strength of U.S. allies.
Do the present U.S. restrictions on technology transfers allow U.S. allies to
acquire the technology necessary to develop their military and industrial
8. The Soviet Union has a very uneven approach to technological
change. The Soviet militaiy sectors generally stay abreast of the world
level of technolog}^, they innovate and absorb technology^ well, and ex-
port- products and processes to allies and client nations. Soviet civilian
sectors generally lag behind the world's level of technolog-ical develop-
ment ; they innovate and absorb technology poorly. ^loreover, the
Soviet Union imports products and processes from advanced Western,
industrial nations who are likely adversaries or competitors.
How may the sale of selected items of high technology or their transfer through
cooperative agreements best be controlled to avoid significant improvements in
a potential adversary's military capability ? Is indirect leakage of advanced tech-
nology from lesser adversaries or friendly nations to the Soviet Union a major
problem? Is it within the power of the United States to control third country
9. Such countries as Japan and West German}^ have successfulh^
absorbed U.S. technology- and used it to improve their competitive
position in international markets. Some observers believe that the
transfer of teclmolog}' to such countries has contributed to U.S.-
balance of trade deficits.
Is it in the U.S. national interest to limit transfers of commercial technology
for politically and economically competitive reasons? Would such action invite
retaliation by foieii^n governments? To what extent could other countries, par-
ticularly low wage, developing ctnintries, successfully absorb U.S. technology
and pose competitive threats to U.S. exports?
10. There is increasing concern among U.S. labor leaders that the
export of U.S. technolog}' to foreign coimtries, where it may be com-
bined with lower-cost labor, is contributing to a loss of jobs and in-
come in U.S. domestic industr}\
Should the Government impose restrictions on technology transfers which
generate domestic economic dislocations? Do employment and income gains in
technology exporting industries compensate for losses in industries adversely
affected by increased foreign competition?
11. It is asserted that the international trade competitiveness of
U.S. firms can be maintained without restrictions on international
technolog)' transfers, if Government plays a more active role in foster-
ing domestic technological and economic growth.
Sliould Government research and development .*>:pending be increased? Should
the Government provide additional incentives for private R. & D. and moderniza-
tion? Is there any evidence that such activities are effective in stimulating
U.S. competitiveness as well as in counteracting military threats po.^d by
international technology transfers?
12. Some U.S. Government programs, such as Export-Import Bank
credits, investment guarantees, and tax incentives for expoilers
(DISC) , promote the export of U.S. technology'.
Do special incentives for technology exports create distortions in the domestic
marketplace and "push" U.S. technology abroad excessively? Should such
incentives be eliminated?
13. Some foreign govermnents, particularly those in developing
countries, intervene in commercial negotiations on licensing, foreign
investment, and other technology transfer arrangements in order to
enhance the bargaining power of recipient enterprises.
Do U.S. technology sales earn adetiuate profits when exported abroad, particu-
larly to countries who.'^e governments exert controls over imports? Ai-e U.S.
exporters compensate<l adequately for R. & D. costs and costs of transferring
technology? If it is indeed true that technology sold abroad is underprice<l. what
policy action is available to the U.S. Government to correct this? Should the U.S.
Government intervene? If so, how?
14. Industrial cooperation arrangements, involving long-term ties
and extensive personal contacts, have usually been the most effective
means of conducting commercial technology transfers.
In what context should the T^.S. Government encourage technology exports
suited for developing more active mechanisms involving transfers of know-how.
and less concerned with mechanisms for export of products? Should these mech-
ani.sms be more formalized than they are now?
15. The mechanisms of technology transfer are important to both
the exporter and recipient nations. Tlie most effective form for transfer
is the "active" system transfer, involving people as well as products.
Soviet leaders would like to limit imports of tliis foi-m beeaiise such
imports breach tlieir control and security systems. Tlie [;iiited States
has an interest in controlling these effex;tiv^e transfers as they may
have especially significant etiects on Soviet economic performance.
What policy ^lidelines can be developed in the area of export licensing which
take into account export risks and grains of various exporting me<'hanisms. Uiulcr
what conditions should the most effective transfer mechanisms be used in U.S.-
16. East-West technological interdependence is an important issue.
U.S. science and technology exchanges are based on an assumption of
What are the U.S. technology transfer policies relating to the importation of
technology from the socialist economies? Are there other informational benefits
to be gained from foreign trade, industrial cooperation, and bilateral science and
technology exchanges? What technology do we import from the East?
Topic 7: The Effectiveness of Existing Organizational Arrange-
ments in the Executive Branch in Regulating Technology
Transfers from the United States
1. To effect meaningful controls, U.S. agencies must be able to
monitor tlie use and further transfer of advanced U.S. technology
which has been provided to a foreign country'.
Are U.S. intelligence collection and analysis capabilities sufficient to identify
the misuse or improper allocation of U.S. teclinology ?
2. In the past the Ignited States has relied on unilateral controls on
advanced teclinology to avoid undesirable technology transfers. For
those technologies that the United States does not monopolize, con-
trol depends on being able to achieve multilateral agreement with other
supplier nations. Other supplier nation policies (or lack of policy)
governing exports of critical technology often differ from ours. They
either do not perceive the security implications of their technology^
transfei's, or believe that economic/political factors outweigh them,
or measure their national security on a different scale, or have an in-
herent distrust of U.S. policy. ^Aliatever the answer (s), the ability to
control critical teclinology^ transfers to either Communist countries or
to LDC's Avill be affected by the policy and perceptions of other West-
ern supplier nations. It is important, therefore, in developing U.S.
policy to understand the political and economic motivations of indus-
trial supplier nations for transferring technology, and whether they
are likely to be long or short term in duration.
Can Western technology transfer policy be coordinated? Is a reform of the
Coordinating Committee (Cocom) procedure likely to meet the needs? Are
Western policies so diverse and contradictory that a unilateral U.S. policy of
denial or restriction is no longer likely to be effective? What alternative courses
of action are open to the United States?
3. Most technology export decisions are made in the Department of
Commerce, but some are made in the Department of State, in the
AYliite House, or in other Federal agencies. Numerous other govern-
ment agencies, including the Department of Defense, make important
contributions to the decisions concerning the military and security
implications of such transfers. It is possible that the national security
implications of some technology transfers may be overlooked because
of the lack of a central authority. Centralization may, however, create
undue government expense and an administrative bottleneck to the
decision process. Perhaps an improvement in coordination is called
for and would suffice. Currently, there are a half dozen agencies re-
sponsible for controls of U.S. technology transfers. Transfers to the
Communist countries are controlled b}^ one system of bureaucracy,
nuclear exports another, and munitions and military related commodi-
ties by yet another. Agencies such as DOD, DOE, and XASA deal
directly with other nations under bilateral agreements for coopera-
tion in some areas of advanced technology with only self-imposed
How do each of these bureaucratic control systems operate intra and inter-
ajrency and where do they duplicate or overlap in their functions? Specifically,
how does each control system collect, store, and retrieve information on past
transfers, and how is such data utilized in the licensing process and in the de-
velopment of new technology transfer policy. How might new organizational
arrangements eliminate duplications and deficiencies of existing control systems?
4. The U.S. Arms Control and Disarmament Agency is responsible
for formulating U.S. Government arms control and disarmament
policy. It has been given a substantive role in executive policy
and decisionmaking organizations relating to the arms control aspects
of exports of armaments and munitions. It is not clear to what extent
ACDA participates in policy decisions regarding transfers of other
technology that could have an impact on national arms control and
disarmament policy. These decisions would relate to exports of nuclear
facilities and materials, and to exports of other nonmilitary connnodi-
ties (for example, advanced computers) that could be significant from
an arms conti'ol polic}^ viewpoint.
What role and responsibilities does ACDA have in executive branch mecha-
nisms controlling exports of armaments, nuclear facilities, materials and tech-
nology, and other high technological items that could have an arms control
relevance? Do otlier departments and agencies such as the Defense Department
and the State Department consider arms control factors in making executive
decisions regulating technological exports? What improvements might be in order
to give arms control policy factors an appropriate weight in such decisionmaking?
5. Long-term commercial transfers of technology to Soviet end
users by private American firms may be among the most effective U.S.
A'ehicles for influencing Soviet economic perfoi-nmnce. At present,
there appears to be inadequate coordination among the agencies of the
U.S. Government and private commei'cial interests. Factual informa-
tion about private transactions of U.S. firms with tlie U.S.S.R. is
sparse. Likewise, the executive and legislative branches of Government
have not developed aji agreed Federal policy or mechanism for co-
ordination witli the ])rivate sector.
What effective legal and administrative options are open to the Congress and
the executive branch to develop a coordinates! policy on private, commercial
transfer of technoU)gy? How can a Federal policy best be communicated to the
jjrivate commercial sector and administered? Specifically, are new legislation or
new administrative mechanisms needed to provide a means of governmental
intervention in private foreign commercial relations? What initiatives niijjlit tlie
Department of State undertake to improve tlie data base of international trans-
actions? Would there be a role here for the Departments of Treasury and
Topic 8: The Adequacy of Existinof Legislation and Rej^ulations
With Respect to Transfers of Technology From the United
1. In some cases the existing technology transfer control system
may fail to identify technology transfers that carry serious military
implications although they do not involve lethal systems or classified
information. Perhaps revision of the U.S. Munitions List and/or other
export control lists is warranted, not necessarily increasing the numbei'
of items covered, or some otJier mechanism adopted, so that national
security consideraions will be routinely included in the decision
Do legislation and regulations adequately provide for the identification of
strategic technology and insure that national security implications are properly
considered by the bureaucracy? What changes are required?
2. Technology transfer policies in the various agencies of the Gov-
ernment are not adequately coordinated. Detailed guidance may not
be feasible because of the diverse nature of technology transfers and
recipients, but a policy statement could provide guidance on the con-
sideration of security, political, and economic factors and a statement
of relative priorities. Alternatively, a brief statement of general policy
could be accompanied by very detailed specific instructions.
What are U.S. technology transfer policies? Hovr specific should regulations
and legislation be ? Can policy be uniform across the board or should it be country-
specific, item-specific, or technology-specific?
3. The U.S. ^lunitions List identifies all defense ai-ticles for which
the President is authorized to control the export and import. Some
items on the list have significant civilian applications and some items
of strategic importance to the United States are not on the list?
Should the U.S. Munitions List include fewer or more items? Is there a mean-
ingful and useful categorization that can be applied to the items on the list (for
example, offensive/defensive, lethal/nonlethal, weapou/weapon-related/non-
weapon, critical/noncritical, strategic, advanced, sophisticated, significant,
obsolete, obselescent) ?
Topic 9: The Possibilities for International Agreements With
Respect to Transfers of Technology
1. President Carter's announced policy of restraining anns sales
and coproduction agreements included the objective of obtaining the
cooperation of other supplier states and recipient states. It has not
been shown that I^^.S. unilateral restraints or other efforts will lead
to such cooperation. In general, the United States cannot by itself
eifectively control the international transfer of technology but needs
the cooperation of other nations.
What actions by the United States are likely to promote international coopera-
tion in restraining the international flow of technology that is considered de-
stabilizing or detrimental to U.S. interests? What are the motivations which
prompt foreign nations to promote or restrict the transfer of various tech-
nologies? What other goals might be sought in international agreements regard-
ing technology transfer? Given the difliculties of controlling data flow as such,
the lack of legislative authority to control technical data in several Western
countries, and the usual presence of equipment in significant technological trans-
fers: should the U.S. urge other countries to adopt more formalized controls
on the transfer of technical data or concentrate efforts on tightening multi-
lateral controls on keystone items of production equipment related to critical
2. In the United Nations Conference on Trade and Development
(UXCTAD) meetings the Ignited States has supported the establish-
ment of voluntary international guidelines for technology- transfer
rather than mandatory^ rules. The possible effectiveness of nonbind-
ing and voluntary guidelines is questionable. However, it is also doubt-
ful tliat a legally binding agreement could be strictly enforced.
What should be the nature and scope of proposed guidelines for international
technology transfers (code of conduct for technology transfers) ?
3. Science and technology' exchange agreements are becoming in-
creasingly prominent in the United States-Soviet relations.
Should the United States make further science and technology exchanges con-
tingent on the principle of joint research? Is an emphasis on exchanges of basic
research rather than industrial applications prudent in terms of safeguarding
national security and proprietary interests? How should exchange activities be
financed? How should information generated by such activities be disseminated?
How can the language barrier be overcome? How does the United States assure
itself of a quid pro quo? Is the quality of Soviet science relative to U.S. science
suflicient to justify joint cooperation? ^Miat benefits accrue from these
4. The U.X. Conference on Science and Technology for Develop-
ment raises questions concerning the interrelation of science and tech-
nology with economic and social development.
What current U.S. policies toward technology transfers and foreign assistance
may be affected by U.S. participation in a worldwide effort at helping the LDC's
5. Certain international arrangfements now exist and there have
been a variety of proposals made for additional international arrange-
ments to facilitate and to control nuclear transfers.
What international agreements and arrangements now exist that regulate
international transfers of nuclear technology? Wliat are the purposes of these
arrangements and liow successful have they been in achieving them? What has
been the record of U.S. participation in these arrangements? What is the desir-
ability of establishing additional international regimes governing transfers of
nur-lear teclinology among nations? In particular, how effective have the Inter-
national Atomic Energy Agency, the International Energy Agency, and the
Nuclear Agency of the OECD been in providing for the international transfer of
nuclear technology? How effective have they been in preventing the transfer of
dangerous nuclear technology? Should the Ignited States share its nuclear weap-
ons security and nuclear fuel cycle safegunrds and security technologies with
other nuclear nations in the military security interests of the United States?
6. One element of military security is reliable high-resolution re-
mote sensing satellites — "spy'in the sky." It is of benefit to the security
of tlie United States to be able to detect with assurance any threaten-
ing mobilization and to go from macrosnrvcillancc to detailed or
microsurveillance of suspected activities. Eemote sensing technology
has many important nonmilitaiy-related purposes sucli as weather
monitoring, crop monitoring, and mineral detection.
What is the U.S. Government's net assessment of the advisability of trans-
ferring reconnaissance satellite technology? Are there possibilities for interna-
tional agreements for the protection of reconnaissance satellites or for sharing
certain reconnaissance information and technology ?
RELATED LEGISLATIVE REQUIREMENTS
The Export Administration Amendments of 19TT and the Interna-
tional Security Assistance Act of 1977 reflect the increasing concern
of the Congress OA'er administering an efficient export control proce-
dure which would insure an orderly marketing of U.S. exports, thereby
streno-thening the international competitive position of the Laiited
States while at the same time taking into accomit the national security
and military implications of international technology transfers.
To encourage a more thorough examination of U.S. export control
policy the two Acts require the executive branch to study and report
to Congress on: (1) The national security and military implications
of international technolog^y' transfers; (2) the impact of current ex-
porting patterns on the international competitive position of the
United States in advanced industrial technolog^^: (3) possible meas-
ures to facilitate the export control process by simplifying and clari-
fying rules and regidations : (4) the effectiveness of multilateral export
controls (tlie Cocom list) ; (5) modifying both the unilateral and
multilateral control lists to include only those articles and materials
which would make a significant contribution to the military potential
of any countiy threatening or potentially threatening the national
security of the United States (bring into practice the ^'Bucy report"
Interest in the impact of technology transfer has not been limited
to the United States. The OECD, for example, has been examining the
transfer of technolog}^ between East and West to examine what issues
of policy it may raise for OECD governments.
A more specific discussion of U.S. studies to be conducted, inter-
agency reviews and reports to Congress as required by Public Law
95-92 (International Secui'ity Assistance Act) and Public Law 95-52
(Export Administration Amendment of 1977) follows:
Studies To Be Conducted
1. rnblic Law 05-92 ("International Security Assistance Act of 11>77) section 24
(a) requires the President to conduct a comprehensive study of the policies and
practices of the U.S. Government with respect to the national security and mili-
tary implications of international transfers of technology in order to determine
whetlier sucli policies and practices should he c]ian.2:ed.
2. Pul)lic Law 9.V52 (Export Administration Amendments of 1977) section
119 refpiires tlie President, acting? through the Secretary of Commerce. Secretary
of LaJ>or. and the International Trade Commission to conduct a study of the
domestic economic impact of exports from the Ignited States of industrial tecli-
nology wliose exports requires a license under the Export Administration Act of
1969. Sudi a study must include an evaluation of current exporting patterns on
the international competitive position of the United States in advanced industrial
1 For a niorp tliorouirh explanation of the "Bucy report" and the role of the Department
of Dofense in contrnllinff exports of advanced technolojry, see the statement of Dr. Ellen
Frost. Depntv Assistant Secrftary of Defense before the Sul)committoo on International
Eeonomio Policy and Trade, U.S. "Congress. House Committee on International Relations,
Oct. 2.-J, 1077.
teclinolojjy fields and an ovaliiation of the present and future effect of tliese
exports on domestic eini)l(>ynient.
8. Pnblic Law !)r»-r>2 (Export Administration Amendments of 1077) section
120 requires the Secretary of Commerce to conduct a study of the transfer of
technical data and other information to any country to which exports are r»*-
strictwl for national security purposes and the problem of tlie exiK)rt. l>y jMihli-
cations or any other means of public dissemination, of tecl)nical data tlie exiK)rt
of wliicli miffht prove detrimental to the national security or foreign policy of the
1. Public Law 05-52 (Export Administration Amendments of 1077) section
114 requires the Secretary of Commerce, in consultation with appro]>riate U.S.
Government departments and agencies to review the rules and retruhitions issued
under Public Law 05-52 and the lists of articles, materials and supi)lies which
are subject to export controls in order to determine how comi)liance can be
facilitated by simplifying such iiiles and regulations, or by simplifying or
clarifying such lists.
Review by the President
1. Public Law 05-52 (Export Administration Amendments of 1077) section
103 requires the President to periodically review the L'.S. export policy toward
individual countries to determine if T'.S. liolic.v is appropriate, taking into ac-
count such factors as the country's present and potential relationship with the
United States, its present and }X)tential relationship to countries friendly or
hostile to the United States, and its ability and willingness to control retransfers
of U.S. exports in accordance with U.S. policy.
Reports to Congress
1. Public Law 05-02 (International Security Assistance Act of 1077) section
24(c) requires the President to submit to the Congress a report setting forth
in detail the findings and conclusions of the study conducted pursuant to sec-
tion 24 (a) (study of technology transfers) together with recommendations for
legislation and administrative action no later than August 1078.
2. Public Law 05-52 (Export Administration Amendments of 1077) section
103 requires the President to report to Congress no later than December 31,
1078, in the semiannual report of the Secretary of Commerce the results of his
review of U.S. export policy toward individual countries (as required by Public
Law 05-52 section 103) together with the justification for U.S. policy.
3. If the President exercises the authority conferred by Public Law 05-52
section 106 prolnl)iting or curtailing the exportation of any agricultural com-
modity, he shall immediately report such action to the Congress, setting forth
the reasons in detail. If the Congress, within 30 days of receiving the report,
adopts a concurrent resolution disapproving such action then, the prohibition or
curtailment shall cease to be effective.
4. Public Law 05-52 (Export Administration Amendments of 1077) section 114
requires the Secretary of Commerce to report to Congress on actions taken on
the basis of the Secretary's review of export regulations and lists (as required
by 05-52 section 114) not later than Tune 1078.
5. As required by Public Law 05-52 (Export Administration Amendments of
1077) section 117, the President shall submit to Congress no later than June
1078 a special report on multilateral export controls in which the United States
participates pursuant to the Export Administration Act of 1060 and the ;Mutual
Defense Assistance Control Act of 1051. The purpose of this report shall be to
assess the effectiveness of such multilateral export controls and to formulate
specific proposals for increasing the effectiveness of such controls.
6. Public Law 05-52 (Export Administration Amendments of 1077) section 118
requires the Secretary of Commerce, in cooperation with appropriate T\S. Gov-
ernment departments and agencies, to undertake an investigation to determine
whether the U.S. unilateral controls or multilateral controls in which the Ignited
States participates should be removed, modified or added to protect the national
security of the T'nited States. Such an investigation should take into account
such factors as the availability of such articles, materials and supplies from
other nations and the degree to which the availability of these articles and ma-
terials would make a significant contribution to the military potential of any
country threatening or potentially threatening the national security of the
United States. The results of this investigation shall be reported to Congress
no later than December 31, 1978.
7. l*ublic Law 95-52 (Export Administration Amendments of 1977) section 119^
requires the President, acting through the Secretary of Commerce, the Secretary
of Labor and the International Trade Commission, to report the results of the
Technology Export study as required by Public Law 95-52 section 119 by June
8. Public Law 95-52 (Export Administration Amendments of 1977) section 120
requires the Secretary of Commerce to report to Congress by June 1978 his as-
sessment of the impact of the export of technical data and other information on
the national security and foreign policy of the United States and his recommenda-
tion for monitoring such exports without impairing freedom of speech, freedom
of press, or the freedom of scientific exchange.
•"An Analysis of Export Control of U.S. Technology — A DOD Perspective." A
Report of the Defense Science Board Task Force on Export of U.S. Technology.
Feb. 4, 1976. Washington, Office of the Director of Defense Research and Engi-
neering, 1976. 39 p. (The Bucy Report.)
Basiuk, Victor. "Technology, World Politics, and American Policy." New York,
Columbia University Press, 1977. 409 p.
Fleron, Frederic J. Jr., (Editor) "Technology and Comnumist Culture, tlie
Socio-Cultural Impact of Technology Under Socialism," New York : Praeger,
Hahn, W. A. and S. L. Doscher. "Summary, Synthesis and Review." In Marvin
J. Cetron and Harold F, Davidson, eds. "Industrial Technology Transfer."
Proceedings of the NATO Advanced Study Institute on Industrial Technology
Transfer. Les Arcs-Bourg St. Maurice, France, June 22-July 4, 1975. Noordhoff,
Ley den, 1977. pp. 429-469.
National Science Foundation. "The Effects of International/Technology Trans-
fers on U.S. Economy." Pai)ers and Proceedings of a Colloquium Held in Wash-
ington, D.C., November 17, 1974. July 1974. Washington, U.S. Govt. Print. Off.,
1974, 109 p.
Nau, Henry R. "Technology Transfer and U.S. Foreign Policy." New I'ork,
Praeger Publishers, [1976, 325 p.] Praeger Special Studies in U.S. Economic,
Social, and Political Issues.
"New U.S. Initiatives in International Science and Technology," Workshop Re-
ix)rts [of a Conference held in] Keystone, Colorado, April 13-16, 1977. Con-
ducted by Center for Public Issues, Denver Research Institute, University
of Denver, Sponsored by National Science Foundation. Denver, August 1977.
U.S. Congress. House. Committee on Foreign Affairs. Subcommittee on National
Security Policy and Scientific Developments. "Beyond Malthus : The Food/
People Equation." Prepared by the Foreign Affairs Division, Congressional
Research Service, Washington, U.S. Govt. Print. Off., 1971. 96 p. (Prepared by
Allan S. Nanes. ) (Committee print.)
U.S. Congress. House. Committee on Foreign Affairs. Subcommittee on National
Security Policy and Scientific Development. "Brain Drain : A Study of the Per-
sistent Issue of International Scientific Mobility." Prepared by the Foreign
Affairs Division, Congressional Research Service, Library of Congress. Wash-
ington, U.S. Govt. Print. Off., 1974. (Prepared by Joseph G. Whelan.) (Com-
mittee print. )
U.S. Congress. House. Committee on Foreign Affairs. Subcommittee on National
Security Policy and Scientific Developments. "Commercial Nuclear Power in
Europe: The Interaction of American Diplomacy With a New Technology."
Prepared by the Environmental Policy Division, Congressional Research Serv-
ice, Washington, U.S. Govt. Print. Off., 1972. 168 p. (Prepared by Warren
Donnelly. ) ( Committee print. )
U.S. Congress. House. Committee on Foreign Affairs. Subcommittee on National
Security Policy and Scientific Developments. "U.S. Scientists Abroad: An
Examination of Major Programs for Nongovernmental Scientific Exchange."
Prepared by the Science Policy Research Division, Congressional Research
Service, Library of Congress. Washington. U.S. Govt. Print. Off., 1974. 163 p.
( Prepared by Genevieve J. Knezo. ) ( Committee print. )
U.S. Congress. House. Committee on Foreign Affairs. Subcommittee on National
Security Policy and Scientific Developments. "U.S.-Soviet Commercial Rela-
tions: The Interplay of Economics, Technology Transfer, and Diplomacy."
Prepared by the Economics Division, Congressional Research Service, Library
of Congress. Washington, U.S. Govt. Print. Off., 1973. (Prepared by John P.
Hardt and George D. Holliday. ) 105 p. (Committee print. )
U.S. Congress. House. Committee on International Relations. Subcommittee on
Economic Policy and Trade. "Department of Defense Policy Statement on
Export Control of United States Technology." Hearings, October 27, 1977.
O.jtb Congress, 1st session. Washington. U.S. Govt. Print. Off., 1977. 19 p.
U.S. Congress. House. Committee on International Relations. Subcommittee on
International Security and Scientitic Affairs. "Science, Technology, and Di-
plomacy in the Age of Interdependence." Prepared by the Congressional Re-
.search Service, Library of Congress. Washington, U.S. Govt. Print. Oft'., 1976,
462 p. (Prepared primarily by Franklin P. Huddle and Warren Johnston.)
U.S. Congress. House. Committee on Science and Technology. Subcommittee on
Domestic and International Scientific Planning and Analysis. "Review of
Technology Transfer to the Organization of Petroleum Exporting Countries."'
Special Oversight Report Xo. 4. 94th Congress, 2nd session. November 1976.
Washington, U.S. Govt. Print. Oft"., 1976, 23 p. (Prepared by Claire R. Geier.)
U.S. Congress. House. Committee on Science and Technology. Subcommittee on
Domestic and International Scientitic Planning and Analysis. "Technology
Transfer to the Organization of Petroleum Exporting Countries." Hearings,
October 1975. 94th Congress, 1st session. Washington, U.S. Govt. Print. Oft".,
197."i. 460 p.
U.S. Congress. House. Committee on Science and Technology. Subcommittee on
Domestic and International Scientitic Planning and Analysis. "Technology
Transfer to the Middle Ea.st O.P.B.C. Nations and Egypt, 1970-1975." Back-
.sn-ound Study Prepared ... by the Science I*olicy Research Division, Con-
gressional Research Service, Library of Congress. September 1976. 94th
Congress, 2d session. Washington, U.S. Govt. Print. Off., 1976. 174 p. (Com-
mittee print). (Prepared by Wendy Schacht.)
CoNTRIBtTlIXG CoXGRESSIOXAL RESEARCH SeRVICE StAFF jNIeMIJERS
Economics Division. — George Holliday.
Foreign Affairs and National Defense Division. — Don Alderson, R()l)prt Bell,
Vita Bite, Alva Bowen, Louella Christoplier, Richard Eisenman, Ted Galdi,
Mark Loweiithal, Clyde Mark, Jonathan Medalia, Allan Nanes, Charlotte
Phillips, Robert Shuey, Larry Storrs, Robert Sutter, William Whitson, Joel
Woldman, and Jim Wootten.
Science Policy Research Division. — Walter Halm, Claire Geier, Geneveive
Knezo, and Wendy Scliacht.
Senior Specialist Division. — Ronda Bresnick, Warren Donnelly, Charles Gellner,
John Hardt, Frank Huddle, and William Inglee.
Office of Coordination and Review. — James Sayler and James Robinson.
Office of Research and Analysis. — Elizabeth Yadlosky.
Clerical Support. — Elizabeth A. Brown, Janet Bullock, Beverly Childers, Eliza-
beth Hoover, Kathy Hume, Sandra Hunt, Louisiana Jones, Cheryl Powell,
iVIary Radtke, and Dale Shirachi.
UNIVERSITY OF FLORIDA
3 1262 08527 7415